Consolidate Your Bank Accounts and Make Your Life Easier
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It's another month, so I wanted to do another quick finance challenge. Last time, I was talking about paying just one small debt in a month to give yourself a boost.
Now I wanted to focus on something that can help you keep your finances under control- consolidating your bank accounts. I encourage you to eliminate unnecessary and/or duplicate accounts.
If you have way too many accounts, when tax time comes, you have to wait to get all your financial documents. Eliminating extraneous bank accounts can make your financial life a little less stressful.
Consolidate and Simplify Your Bank Accounts
Keeping it simplified means you're more aware of where your money is going and you can keep track of the accounts.
Automating our finances has been a huge help, but it's not the end all solution.
Adam from Man Vs Debt discussed this in Unautomate Your Finances.
Being conscious of your money can help you make the change that you need with your finances. He argues that sometimes by just making it more convenient, we're not solving the root of the problem, just putting a band-aid on it.
Decide on What You Need from Your Bank Accounts
The first step is probably defining what you need from bank accounts. We've had to change banks when we weren't getting the customer service or the features we wanted.
Check your accounts and see if they meet your criteria. If not, you may want to move your money.
When you're looking at different types of checking and savings accounts, have a list of what you need and what you want.
- Is it covered by FDIC (banks) or NCUA (credit union)?
- Check to see if the accounts have no monthly maintenance fee.
- Does it have a required minimum balance?
- Is free online billpay part of the account?
- Do they have conveniently located ATMs?
- Do your accounts earn some interest rate?
Do you plan on using other financial products from your bank, such as insurance or CD (certificates of deposits) accounts?
Your Take on Bank Accounts
How many bank accounts do you need? Each situation is different, so I can't answer that for you. I can tell you that we utilize a mix of joint and individual checking and savings accounts.
How many do bank accounts do you have? How do you stay on top of it? I’m be curious to see how others handle this.
I gotta admit, I do the exact opposite and create multiple accounts using my “going broke to win big strategy”. I’ve got a debt bank, several savings bank, and a cash flow bank so I can maximize my returns, lower my debt, and have nothing in my cash flow bank so I don’t tempt myself.
Seldom, if ever will one bank have it all! That is why some banks have such higher CD/savings rates.
I finally consolidated a couple of my checking accounts into one and am saving $20 a month in fees. However, because my husband and I have a business, we still are left with 4 accounts at a major branch (2 business and 2 personal) plus an online savings account. The total: 5 accounts.
@Financial Samurai: Thanks for sharing your system!
That’s why having hard and fast rule sin finance are rare – what’s deemed necessary for one person is a duplication for another.
I think key to determine how many accounts you should have is how many can you keep track of.
Being conscious of your money is vital. You shouldn’t have to track it every minute, but you should be able to get the balances easily.
@Little House: Yeah, having a business definitely requires keeping additional accounts. I have separate checking and savings for the business and with it being automated, it’s been a breeze so far.